stuart: try this for fiscal cliff deal, tax now, promise to cut spending later, ignore the deficit. good morning, everyone. three statement. harry reid says tax hikes for the rich, john boehner talks more tax revenue, union boss from xhosas deficits are not priority. read between the lines. taxes up soon, spending may drop later, the debt will go up. that was a big part of the stock sell-off yesterday. the dow is below 13,000. a serious hardship story for you. new york area hit with another storm, more power outages, more destruction. this will hurt the whole

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stuart: two days after the election the fighting is starting on capitol hill. all about the fiscal cliff, the national debt and taxing the rich. no matter which way you look at it a tax increase looks almost certain and soon. here is senator harry reid. >> people making all this money have to contribute a little bit more. all the polling we have done, the vast majority of the american people support that, including rich people. stuart: the president and harry reid have more clout after the election and they are pushing tax the rich. house speaker john maynard taking a much softer line. is he hinting compromise on tax money to washington? listen to this. >> there's an alternative to going over the fiscal cliff.

in whole or in part. involves making real changes to the financial structure of entitlement reform and reforming our tax could occur bit special-interest loopholes and deductions. imus: got that? organized labor's joining the conversation. tax now, cut later. richard trumka says don't worry about the deficit. >> we strongly believe we should make sure the wealthy start paying their fair share of taxes. they believe we should protect medicare aad medicaid and social security benefits from cuts and voters reject the idea that bringing down the federal budget deficit is an overriding priority. imus: you add it all up, bottom line from the statements, a deal on the fiscal cliff would mean a tax increase. no deal means we go right off the fiscal cliff and we'll get a

huge tax increase. bottom line, pay up. $16 trillion in debt and richard trumka thinks controlling it should not be a priority. does that mean we will end up like greece? greece what about its death, didn't get it under control and look at them. they are rioting in the streets. severe budget cuts, more of them coming to greece. are we headed that way? we ask that question to former reagan adviser art laughter. where will stock ago today? 300 point drop. you can watch it live, opening bell, art lauuhter coming up next.

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stuart: a minute to the thursday morning opening bell. flash back to wednesday. big day, big down day, the dow is off 300 points. i call this the obama sell-off. direct result, in my opinion, because all kinds of industries will be hit very hard in a second obama term. plus we face the likelihood of a tax increases in because we are trying to get the fiscal cliff deal done and if there is no fiscal cliff deal done, we go over the cliff and there's a huge tax increase for everybody. market didn't like any of it. where are we today? we are likely to open 20 or 30

points higher. not much of a bounce. we have 355,000 people filing for first-time jobless benefits. at number depressed because of the storm, likely to be revised in the -- in greece the parliament voted for another $17 billion worth of austerity measures. they want two more years to payback their debt. they want another $50 billion worth of aid. they're in a continuing mess. could be a factor for the market today. check the big board, 12 seconds into the trading session we are down. i think we will bounce back a little, 30 points ira having looked at the futures. not much of a bounce and we are below 13,000. whole foods, purveyors of organics to be elites a superstorm sandy will hurt sales. i bet the latest nor'easter won't help either. how much down is holding? nicole: it is down 4% on a day we are virtually flat but

looking at whole foods coming under pressure coming out with numbers and basically saying superstorm sandy is disrupting the shopping pattern. you think? pretty much. that is sort of obvious, they are not running whole foods, but the company did reiterate profit and sales forecast for 2013 at a 40% increase in quarterly dividend. those things sound good. stuart: governor cuomo of new york and mayor bloomberg of new york city both say all these storms other results of climate change and i am personally absolutely convinced that whole food shoppers agree with them. >> i would say whole food shoppers are probably in line, who knows? whole foods open around to go there twice. [talking over each other] stuart: your time is up. dow jones industrial average up three points in the early going.

actress and the ten days ago, back in the dark. a nor'easter swept across the tristate region last night. heavy rain, wind, snow, several inches, a foot at the shore, the area knocking out power for 130,000 more people. that is the result of the latest storm. 130,000. bring in the grand total, sandy plus the latest storm and you have 700,000 households without power. that will lead economic impact across the nation. back to the big story. tax hikes. i think they are on the way. spending cuts, maybe. all of this the battle over the fiscal cliff. joining us is arch laugher, former advisor to president reagan and a valued guest on "varney and company". welcome back. >> thank you. lovely to be of value. stuart: i like the word value. >> it is a wonderful word. stuart: we have forgotten the true meaning of value but that

is another story. i have been saying throughout the day that i think there may well be a fiscal cliff deal and that deal would be higher taxes now, immediately, promises of spending cuts down the road and according to richard trumka, don't care about the deficit. you go along with that? is that the kind of deal that might shape up? >> it makes sense. frankly republicans have lost heart. they shouldn't have but they have. that is the type of deal you will see happening and you will see a fiscal cliff. i don't like to call it is cliff. i like to call it tax armageddon. of the tax rate on the rich don't you will see a poor performance in 2013. you are going to see it anyway because people have already shifting, out of 2013 into 2012 and it is already baked into the cake to a large extent. you are going to see a real drop. stuart: there's a lot of tax planning going on in the next

few weeks because you want to shift income into 2012 as much as possible and remove it from 2013 you face a higher rate and making serious money. >> if you look at the growth rates in 2012 they are off land that is after being inflated by this tax shifting. we are going to see a sharp drop in 2013 and i want to see what congress does but i think the republicans are making a huge mistake if they concede to the democrats these issues. you have got to remember they won more than half of the seats in the house. all of them contested elections. four years ago it was controlled by democrats and now is controlled by the republicans, picked up one governor, a couple state houses which over. if the republicans are not at a loss we lost the presidency and we lost some of the governors, some of the senate races because of poor performance on the candidates themselves.

i don't think we should give up on the growth agenda. stuart: don't give up. we shouldn't give up. i understand but i think you are with me in saying we probably -- the republicans probably will cave. >> i think they will. i totally agree with that but they shouldn't. especially not on tax rates on the rich. the high income people determine the jobs. that is where they will make their biggest mistakes. stuart: fan can i bring in another story? why office story. i want to bring our viewers into this one. next story is greece. greece just past another $17 billion worth of austerity measures that was rioting in the streets of athens for the third straight day, violent protests, watch the video, molotov cocktails, really nasty stuff. tear-gas fired. you know the reports about this, more austerity in greece, but a

lot of people say to me are we in america heading down the same road? my answer is yes we are but we are nowhere near the greece situation yet. what do you say? >> the u.s. is leading the parade and greece happens to be the most vulnerable country in this process. greece is following the example of the u.s. over the last six seven or eight years and so with spain and other countries and the u.s. is a central nation of the world economy. we are leaders and if we don't show fiscal discipline, if we don't show how to run things properly how can we expect greece to do it? stuart: what is the end game? >> the end game is the u.s.. [talking over each other] stuart: what happens? we certainly have a crisis where nobody lends as the money, print of the storm. what is the actual -- how does it work out? >> in the u.s. the end game changes in 2014, changes in the

state and local governments going on. we have a huge battle among the states and i think we get to a pro growth agenda as we have not seen in a long time. we would get a ronald reagan in 2016 and the u.s. is going to take off and the rest of the world will accommodate an come back in line. if you look at england, if you look at what is going on in france, it is all the same. it is the u.s. that is not showing the leadership that we should show politically to really get these other countries in line and getting their problems solved. stuart: adds value to the show. he love the word value. excellent stuff. thank you. always a pleasure. if you don't like harry reid's comments on taxes waiting for you hear what he says about climate change and its role in stores like hurricanes and the. we will have the story and of course reaction new at 10:00. harry reid climate change.

back to the markets. apple. i got to ask, where is it? >> up fractionally, doing a lot of nothing after tanking yesterday, we saw it down 20% of of its record highs in september. there is concern about the pipeline and concerns that they don't make as much, costs more to make them and competition. stuart: i have a drugmaker. don't know what they do. it is called catalyst. i think you have some news on it and it is down. >> this is a $44 million company so keep in mind this is micro cap but potential cocaine addiction treatment they have, it is resulting in larger proportion of cocaine during this two week period. that is why you are seeing this stock tanking. you put me on the spot with the climate change talk. i am an expert on business news.

i wasn't ready to answer a question about whole food shoppers pertaining to climate change. stuart: when you object? would you never appear on this nicole: we worked together. stuart: sorry. i didn't want to put you on the spot. i like the green dress. stuff you can get away with, and believable with a british accent. time is money. here's what else we are watching today. as that as the economy is why do so many people wait -- vote for president obama? wait till you hear what the judge thinks about that. obamacare isn't going anywhere so how will that affect hiring? we ask the owner of 40 franchises. will he make his workers part-timers just to stay in business? ten days after sandy y our air still gas shortages in the northeast? we will ask patrick. chime in, send your e-mails to

varney@foxbusiness.com. it is almost 9:40. i will give you seven early mover is. we have better than expected profits at the chipmaker, 15 years ago there were cleaners and stock went straight up all the time. better outlook. electrical componentmaker universal display, that outlook down goes the stock. monster beverages, they are down 7%. outback steakhouse, they took in more money than expected. loral space and communications plans to pay a special dividend, $29 a share. it is up $5. prudential financial's profits disappointing. down goes. went up $0.02. whole foods. we talked about this. never ask nicole a question

about it again. sales hit from superstorm sandy and it is down 2.5%. the dow was up 33 as predicted. a very slight bounce from yesterday's big sell-off. 50-48 for president obama was the result of the popular vote but did mitt romney lose votes to libertarian gary johnson, specially in colorado? john stossel reacts to that next. remember this from the judge? judge napolitano: the reason barack obama won in colorado is because a lot of the pro marijuana boats went to gary johnson. [ male announcer ] at scottrade,

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stuart: the dow industrials dropped 300 points. this is not a bounceback. 37 points tires all you got and the dow is shy 13,000. check the price of oil moving all over the place but today stable at $85 a barrel. a very close presidential election, a few votes in a key state could make a difference. libertarian candidate gary johnson got a million votes nationally. he was very popular in colorado. the canines slice of the market. is he a spoiler for mitt romney? was the? joining us is a leading libertarian named john stossel. was the eighth boiler? john: i was afraid he might be. after trying to vote three times in new york, the government

can't vote, private sector can sell people all kinds of things. stuart: quit whining about the government. that was the storm and climate change. john: it was government -- [talking over each other] john: a big spread. colorado would not have made the difference. johnson won 3.5% in new mexico. obama won by 10%. stuart: i think libertarian people and primarily causes of libertarians have done well in this election notably legalization of drugs and gay marriage. those are issues for libertarians. you favor both and did well. john: not well enough. we favored both but in many local raises people in indiana, people who advocated school vouchers were defeated by lobbying by the teachers' union.

all these democrats cheering on big government being elected. stuart: the gop is being told you got to modernize, get with the flow. got to improve yourself and one way is to get on to social issues like gay marriage and get on to drugs, get on to immigration. i put it to you that libertarians occupy firm territory, more territory. john: do you think so? >> i'm a political analyst. we don't occupy enough to help the republicans because a lot of people are frightened by these ideas. people like me have more educating to do. stuart: young people are not and that is to the republican party wants. john: there is much more to libertarianism that legalizzng drugs and gay marriage. the big issue is economic freedom and that scares people. people think we will be ripped off if we don't have a lot of banking regulation and we keep getting more regulation and that

kills -- stuart: the country has moved against the idea of individual liberty. the country is moving towards you got stuff, i want more of it, i am going to take it off of you. i will vote for the politician who gives it to me. john: what we see in greece. as you get after when you get used to being given stuff. in greece there getting rid of so-called austerity -- they won't pay you extra for using a computer like they used to do and they are rioting over tiny layoffs. that is scary. stuart: the subject of your show at 9:00 on the fox business network is a libertarian critique of the election. [talking over each other] john: most of the way. 9:00 eastern stossel on the fox business network. the gold report. where are we?

above 1700 but not much movement, 17-18 for the price of gold. tv host chris matthews says something indefensible about hurricane sandy. he has apologized but does that make everything -- people have been fired for a lot less. they are not accepting his apology.

stuart: left-leaning ms nbc anchor dennis: use said he was glad for superstorm sandy because it helped president obama win election. he is apologizing. >> i was on last night for ten hours straight from 5:00 in the evening until 3:00 in the morning. a few minutes to 3:00 i did something terrible. i said i was glad about the coming of tropical storm sandy because of its impact on this national campaign. and is a terrible thing to say period. stuart: when he said because he was tired. for i will start with you. you were in staten island, new york yesterday reporting on dreadful damage, allow the federal response. of what your reaction to the apology. >> yes saying i talk too much.

i am sure people on strand island formerly known as staten island would not appreciate that half-hearted apology and parts of new jersey looking like dennis but the thought police and media matters, who do beverly hillbillies very proud have yet to respond about this and they are attacked example organization. if they were fair and balanced you would see some criticism of saying hurricane sandy is a good thing for the president's reelection. connell: if you was truly apologetic why not do something for the people, go there and try to help out the people? why not criticize fema for dropping the ball the way they dropped the ball in every hurricane. haven't heard anything. if there was a republican president we would hear tons from dennis: use. instead we get this nonsense. stuart: what would happen a fox news guy or lady said something similar. can you imagine?

connell: a deadly storm people as the suffering and he is talking how good it is. liz: how many people dead? keeps rising. stuart: raising taxes to avoid a fiscal cliff not the only thing on senator harry reid's agenda. promising to act on climate change. he is using the hardship of millions to push through his policies. hear what he says at the top of the hour. from local communities to local businesses. the potential of yelp unlocked. nyse euronext. unlocking the world's potential. to a currency market for everyone. the potential of fxcm unlocked. nyse euronext. unlocking the world's potential.

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stuart: senator harry reid promises raise taxes on the rich to avoid because cliff two days after the election. the fight is on in washington. known new at 10:00 harry reid is also playing a bomb blamed game with hurricanes and the. he is not going after fema's slow response. he is blaming global warming for the storm's destruction. you can expect him to push his green agenda using part of millions on the east coast. we will get to that. check the big board. we are 25 points. not much of a rebound from the 300 point loss. the obama sell-off of yesterday. here there there is a morning co. a liz macdonald is back from staten island. welcome back. stranded island. david asman is with us and nicole petallides on the floor of the stock exchange. let's look at the beverage company monster.

nicole: stock to the downside this morning. we have been familiar with a lot of investigations to the safety of the energy drinks. monster holds strong saying there are no issues with their drinks. there have been hard attacks and questions. they came with numbers smaller than expected profit and spending on promotional spending so we are seeing stock with a down arrow. stuart: republicans and democrats on capitol hill are working on ways to avoid the fiscal cliff and they disagree about it but i am inclined to that tax hikes are coming our way and soon. sofer's to david. you agree with that. dave: not entirely. this is the simpson-bowles report brought out five democratic senators voted in favor of this. this lowers tax rates to a top rate 23%. if you keep -- and keep some

deductions. alan simpson co-author of this report says you don't have to raise taxes. go into this tax code where there are $1 trillion of tax expenditures and tax year marks and pull the babies out. stuart: i got it. do you really think a president who has just the quick reelection and the leader of the senate who has just said we are going to hack--- hike tax rate on a rich the think they'll go with simpson-bowles? connell: they sign their names. in signature used to be an oaf, something people took seriously. you could go back to those and say did you believe in this or not. was this not you committing yourself to lowering tax breaks and broadening the base? we ave to have some kind of compromise. i am not a politician. i hate compromise but the fact is -- stuart: barack obama is raise taxes on the rich, raise tax

rates on a ridge. -- [talking over each other] stuart: do you think he will back off on the political? dave: he may be able to gain dignity for himself. [talking over each other] dave: they are going to lose the deduction they used to have. if you are hoping for anything or given up on hope entirely from your perspective, fine. i have a little bit of hope that somebody will do something reasonable in this country. i am hoping and praying let me hold on to that glamour, slim thread of hope. rich: irrational hope alive. stuart: lower tax rates would hope of a romney suppose the incoming administration. they lost. dave: raising taxes and raising tax rates are two different things. democrat kent conrad and democrat dick durbin by this report, we may get somewhere.

liz: i agree with everything david said. stuart: still go with hope and change. sarcasm is a low form of which. what was that -- 3.0%, freddie mac, 30 mortgage rate three minutes ago. i have neglected. 3.40% very close to historic lows. let's get back to new at 10:00. harry reid is concerned about climate change. listen to this. >> climate change is an extremely important issue for me and i hope we can address it reasonably. something we have seen with these storms, overwhelming our country and the world and we need to do something about it. stuart: blaming hurricane sandy on global warming. liz: i agree there is climate change. the glaciers are melting, sea levels are rising. i'm not sure it is something we need to address -- do job creation first but this is an issue even conservatives have said this is happening. stuart: he is going to introduce

cap and trade which is and of -- excellent former enhancement. [talking over each other] dave: they lost the debate when they had democrats in the senate and controlling the house of representatives. republicans still control the house. it may be tough to get cap and trade. he will do what he did the first term which is used the epa to enforce cap and trade. without having congress vote on it at all. stuart: tax the oil companies which is what president obama wants to do. bothell view is that. liz: the president promised to stop the rising of the season but now he thinks the government -- [talking over each other] dave: natural-gas may be a compromise, much cleaner than it is than coal and perhaps the oil companies, may get some compromise. i doubt it. i am hoping for it but i doubt it. dave: stuart: you are underestimating the ideological component of

president barack obama. dave: there are still republicans in the house. stuart: was the expression you are not supposed to use? only time will tell? take a look at this number, $2,000. that is the fine employers with 50 workers will have to pay every year per employee if they don't provide health insurance all because of obamacare. before the election our next guest said he might have to move its employees from full-time to part-time if president obama got reelected. what is going to do? joining us is apple metro chairman and ceo who runs 42 apple franchises, 40. before the election use that might have to do this. make full time people part-time people. we had the election. the president won. what you going to do? >> we are going to look at it and business is relatively simple, more money has to come

in and goes out. we are in a business time, fragile environmenn, adding to overhead doesn't add to gdp or put cash in the system or do anything. stuart: how many employees have you got? >> it varies from 80 to as many in manhattan as 300. stuart: 300 employees. you are supposed to give them health care insurance. you face $600,000 a year in fines. those that take away profitability, what does it do to you? >> there are three way is, more efficiencies, and raise prices. in this environment you can't raise prices particularly in our space.

efficiencies, hopefully efficiencies, and seeing more and more in every year. and cut back conover had. stuart: they did provide health insurance. restaurant with 300 people. >> it will be some millions of dollars across the system. what does that say? says we won't build more restaurants the -- liz: a part-time work force because of obama care? >> the model has been set. people are watching this, i don't want to make any commitments one way or the other. we are looking at it and evaluating. it is possible to do without cutting people back. i am delighted to do it but that also rolled back expansion. it will back hiring more people

and in a best case scenario we only shrink the labor force minimally. stuart: any way you slice it if you offer insurance, if you don't offer insurance and pay the fine your overhead goes up. >> took something from the bottom line which we use for ideal expansion, hiring, extending, remodeling restaurants, building the green restaurant to open in three weeks on 117th street in harlem which will be a model for the industry, gather rainwater, compost, garbage, an excess of $4 million. last one we build for the next four years. dave: is this the most challenging time you have ever seen? because of the regulations? >> all the regulations. geo el, what concerns me is i was watching the news last night and i heard the president of the united steelworkers union, sounded like he just invaded ben gauzy and won. with the ground game won and we

showed money can few do it and we are a truly a declaration of war. with his obligation to bid constituency declaring that war and won? dave: further to the left than a first term. >> he has got to sit down and get in a dark closet and use the white house to make friends and forget dinner with molly and his wife and the kids and by various parties at the white house, use that asset as previous presidents have done. instead of quitting and going to dinner, he is the president of the united states. stuart: you always tell it like you see it and we appreciate that. come again soon. ten days after hurricane sandy and long gas lines all over the new york and new jersey areas. is it just a power problem or

are these stations not getting gas fast enough to meet demand? gas body's patrick deion with the answer. california residents voted for the proposal to raise taxes. on tuesday residents approved a measure that would increase sales taxes by 1/4 of 1%. the state says the tax hike would also bring in $6 billion in additional annual revenue from the formerly golden state. that would include a hike in taxes on so-called wealthy california residents. liz is bursting at the seams. liz: tax and spend again and again. if that were the way to go california's unemployment rate would not be north of 11% as it has been traineding and this -- republican democracy the way california is running at. it is mach democracy rule with all sorts of propositions and

being overrun by special interests and the state suffering. [talking over each other] dave: illinois tried to raise tax rates and that will bring us the solution. illinois is in worse shape than it was. stuart: illinois and california voted solidly for president obama. the next administration, second term for president obama will bail them out. it won't be called a bailout. dave: ohio which has a conservative republican governor interested in lowering tax rates, the same with indiana, all the states that doing the right thing in my mind lowering tax rates to bargain the base, they doing well. wisconsin another one. all the states that raising tax rates to bounce the books are getting further -- what does that tell you? dave: the proposition to raise taxes. stuart: proposition 38 in the was. am i right and saying it won by

20 points? liz: gore vidal the author said we truly live in the united states of amnesia because time and again as david pointed out, it doesn't work and they forget we have been through four bubbles since the 90s and the government is in a bubble. we are in a bubble mentality and that is the way they are meeting in california. stuart: 54% for passing proposition 30 which was an increase in personal income taxes on wealthy and sales taxes. dave: good luck. stuart: well said. back to the markets. a couple tech companies are moving. first of all qualcomm. nicole: they make chips for mobile devices, devices and smart phones and the iphone. revenue and earnings per share. past expectations. stock is up $0.50. stuart: apple was down around

$5.50 earlier today. nicole: here is the interesting thing. oppenheimer this morning is saying to buy on weakness. they like the company. they say near-term rebound of 620 and that is where you will hit resistance and we talked about this earlier saying the margins are not going to see the same margins and face intense competition. those things remain but the company is in a competitive position and that is why they are buying on weakness. stuart: down to 549. thank you. we have been talking a lot about this idea of makers reverses takers. people want more stuff from the government and once other people to pay for it. did that swing the election? the judge is next. you know what bill o'reilly things of this. >> there are 50% of the voting public who want stuff. they want things. and who is going to give them things? president obama.

stuart: here is what else we are watching. initial jobless claims $3.55 lower than expected but the labor department says and i say claims are distorted by hurricane sandy probably revise upward in coming weeks. friday the unemployment rate went up to 7.9%. are you looking to buy a house? the rate for a 30 year mortgage

3.4% of a tiny fraction but still almost at a historic low. here is the stock market. how is it moving this morning? catalyst pharmaceuticals cocaine addiction didn't work in trials, down it goes and the judge is coming up next. he is going to tell us why he thinks the entitlement nation and i use the expression and so has he, the food stamp nation for example, why did that help the president get reelected? did it help him get reelected? i say yes and i think the judge will agree with me. you see us, at the start of the day. on the company phone list that's a few names longer. you see us bank on busier highways. on once empty fields. everyday you see all the ways all of us at us bank are helping grow our economy. lending more so companies and communities can expand,

grow stronger and get back to work. everyday you see all of us serving you, around the country, around the corner. us bank.

stuart: your governor andrew cuomo dismissed his chief of emergency management after learning he deployed government workers to his long island home to clear a tree during hurricane sandy. no comment necessary from the judge. as of june of 201149% of americans received some sort of financial support from the government according to the u.s. census bureau. that was a very -- probably gone up to 50% but roughly 50/50. do you think that is why president obama got reelected? judge napolitano: i think comments by bill o'reilly which iran earlier and a lot of us have been running throughout the past day and 1/2, not because he is our colleague but because it is true, he said in two sentence is exactly what the election was

about. jefferson, i knew jefferson, when george iii wanted to hang him minded jefferson, once said when the public treasury becomes a public trough and voters recognize this, they will send to the government people who will promise them a bigger piece of the pie and he was correct. he didn't have a problem is 220 years ago we do today because today that number, that perceive the public treasury as a public trust is almost at the tipping point. almost over 50%. when it reaches 50% those folks will use the tools of the government that they may lawfully take well and freedom from the other or less than 50%. we saw this manifested for the first time, the numbers have gotten so close to 50% under president obama and food stamps doubled under president obama. these folks will be better off

in a free-market economy where as jfk once said a rising tide lifts all ships. they don't see it that way. ac that i want stuff now. i am not talking whether i can be prosperous five years from now or ten years from now. of one free stuff from the government now even if they have to print casual borrow it. stuart: is there an element of revenge? the president used the word before the election, revenge. they want more stuff because this mess is your fault. you got it, you cheated to get it, you didn't work as hard as i worked so i want yourself. judge napolitano: i agree with the romney campaign when they jump on word revenge but too little too late and the president through the use it to the end of the campaign, sunday or monday. that is a horrific motivation to do anything. dave: it is revenge against people like zane tanko who

worked since he was in high school to get where he is. he was not born with a silver spoon in his mouth and there are millions of people like him that are being stepped on -- judge napolitano: people who hate the coax because of their wealth but they employ hundreds of thousands of human beings in good well paying jobs. they could take $35 billion and put it in a shoebox and none of those people would have jobs. he perpetuates a divide in the american public which is horrific for all of us. liz: with big government clients the state is creating a clientele that keeps voting them back into office. will that outnumber the other people? judge napolitano: yes. remember the 47%. was 47% of the time mitt romney said it will be close to 50%. the theory behind woodrow wilson and the progress is enhanced by fdr magnified by lbj was to

create dependence, create political climate in which they have to vote for us for subsistence. we will stay in power and keep cash -- liz: half of that rate in nearly 60s. the federal reserve's superlose monetary policy is an enabling of big government spending. we don't restructure the government unless you have federal reserve in the equation. judge napolitano: imagine if mitt romney or ron paul to replace ben bernanke. stuart: unimaginable. it would never have happened. judge napolitano: you are right but if he promised to do that he might have gone five million libertarians to vote for him. stuart: would really have lost the election yet. judge napolitano: i neglected the too far, no land where the host. stuart: thanks. judge napolitano: you are welcome. stuart: i thought mitt romney would win this election. i was totally wrong. i will tell you where i went wrong. my take is next.

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>> i totally agree with that. and especially not on tax rates on the rich. you know, it's the high income people to determine the jobs, output and plummet, but that is where i think it will make their biggest mistakes. stuart: that was part lawford predicting what will happen. tune in at 9:20 a.m. every morning weekdays.

time from market check, a look at the big board. now we are down 15 points. down 300 yesterday, so a little bit more selling. not much, but a little bit more. check back with the call because something is going on with mcdonald's, and it is not good. >> reporter: the "wall street journal" reporting that mcdonald's had its fourth drop in monthly same-store sales in nine years. when you talk about unemployment, you talk about soft global economy, and the sales that we saw dropping were across the board from the u.s. to europe, asia, middle east, africa, all with down arrows. stuart: by the way, i see apple now down $12. that is a big sell-off. thank you very much, indeed. we knew things were going wrong for mitt romney when the results from virginia came in. dick snyder was on this show several times sounding very confident about virginia. >> and for the past four years we have built the largest grass-roots army in the history of virginia and have had

electoral success over the past three years. this is all going to culminate next tuesday. stuart: it did. obama one. what went wrong in virginia? he will join us to explain. all right. right up to the election date i was expecting a romney wind. i thought it will be a big win, and i said so frequently on this program. here is my take on why i got it wrong. first, mr. wright america. i really thought that a weak economy, mass unemployment, european-style that would mean no second term. i did not realize how president obama had changed america. the people suffering in the obama economy could be bought, and they work. every cell phones, food, and all down the line of giveaways. half the population will vote to give more stuff from the other half. the turnout among the takers when of incredibly. among the makers it went down. and did not see that coming

either. and our politics have become much more personal. the president can now get reelected, in part, by showing up for a couple of hours at a disaster site. a photo op. he looks like he cares. president obama brought together a coalition, and it looked like he cared for each crew. he'll look after you. forget the record, jobs, debt. he cares. apparently we vote for that. i can say that i like this new america, this new politics, as serious superpower does not base its politics and leaders on free cell phones and good looks. i don't like the something for nothing morality. that is what we are, indeed, living with now. please remember, varney -- "varney & co." will always, always worked to restore america to the way it ought to be. i'm a conservative investor.

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welcome back. you did get it wrong because right before the election you were saying you were going to win. what went wrong for the republicans in virginia? >> i used to be a wrestler in college. and when you lose, when you get beat you are up there all alone on the map, and that is really what happened on tuesday. you know, we got beat complain and simple. stuart: why? added that happen? i mean, i always think of virginia as a center to right state. i don't know why i think of it that way, but i do. he lost. >> well, stuart, president obama is an unbelievable campaigner. he put together a terrific round game that the hours. plan and simple. i am not with hundreds of thousands a provisional balance and absentee ballots out there. i think it is a little too early to do the post-mortem of exactly what went wrong because we don't know yet. we will in the next couple of days and weeks to my but i do

not believe we should retreat on our principles. having a free market. stuart: here is maybe an explanation. maybe the nation in virginia has shifted to the changed, to the point where half the population really wants, as bill o'reilly said, stuff from the government paid for by the other half. that would be a shift in american culture, in who we are. the thing that has happened? >> there are clearly changing demographics and virginia. that said to my refused to retreat. i refuse to believe that we need to cave in and say that there should be a larger government. yes, there are a lot of federal employees in virginia. that said to my believe the case can be made that we are going to have more prosperity through a free market, unleashing entrepreneurs like myself out there to turn this economy around. barack obama, i do not think we need to throw the baby out with the bathwater year. we cut the margin the barack

obama had in 2008 in half. halfway to the goal line still is in the test out, so we have a -- plan and simple we got beat, but we should not retreat as a party on our conservative principles. we should not take this thumping and say, oh, my gosh, we need to go back to the entire drawing board. there are certain things we can communicate better and better out there, and are going to learn our lesson. stuart: you think that a political message secured toward what's it grow the economy for everyone as opposed to speaking directly to specific interest groups, you take the big picture let's go for growth. here is my plan for growth. you think that is still a winning political campaign message? >> i do, but you can target as well. this is 2012 going on 13. you can do both. you can have a great macro argument out there about growth, about an opportunity society, and you can pinpoint -- again, i

used to be a technology marketing entrepreneur. you can pinpoint in such a way to get that message out. there are a lot of things unless we have all the data and we will look and say how do we get something rare and have you make sure it never happens again, but retreating and conservative principles is a recipe for disaster. the great thing about viejo is we get to litigate this every year. stuart: 20 seconds, give me a name of an american wrote -- margaret thatcher. regrowth person. >> sure. well, for 14 or 16? or 13? stuart: give me the name of a growth and it. >> well, i think arubia would be terrific. chris christie could be terrific. folks like mitch daniels to flirted, could be very good. i still think, you know, there is oxygen out there for rick santorum. there is a lot -- our bench is incredibly strong.

stuart: thanks. come again. see you soon. ten days after the big storm and there are still long gas lines all over the new york and new jersey states. why are gas stations having some much trouble getting gas in the first press? back to you.

stuart: here is what else. we are watching. little has changed and the jobs front. initial jobless claims

3,505,000. lower-than-expected, but remember, the labor department says those figures were distorted by hurricane sandy. which will continue to affect the market for a few weeks. a big name you know, mcdonald's. sales at stores open at least one year known as same-store sales down for the first time in nine years. gas prices relatively unchanged overnight. the national average per gallon, 346. slightly down. question, why are there still gas lines in the northeast, especially new york and new jersey? we will ask one of our favorite guests. he is with gas body. i am told he has a check for us on the ground. i have given the incredible amounts of free publicity. love. but whether he's climbing everest, scuba diving the great barrier reef with sharks, or jumping into the marke he goes with people he trusts, which is why he trades with a company

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♪ stuart: a nor'easter swept through the northeast yesterday hammering areas already battered by superstars in the. more residence across the east coast lost power. high wind, several inches of snow brought down trees. this storm put the total number of households without power at 700,000. remember that. sandy was ten days ago. some still without power. ouch. a half to get back to the market because big things are happening and apple. way down. what's going on? >> reporter: down $13 right now. we saw it in the early go.

a little apparel. quickly back into the red, but as we noted, oppenheimer saying it is a buying a opportunity. stuart: one other stock. i have to mention it. it's called the walking dead. is that a tv show? >> reporter: the walking dead on amc is humongous. it is about zombies, and it is more popular than shows like modern family and the big bang theory, and that is why the stock is jumping, hitting a new high, coming in with estimates that are beating the street, and it is propelling revenue. stuart: strange isn't it. i was so concerned about the election that i forgot all about the walking dead. my mistake. i'm is to stop there. >> reporter: climate change. stay focused. stuart: doing my best. thank you. ten days after sandy, and the northeast is still suffering. there is some gas. you can get it, but not that much. some stations are open, but even those, some are running low on

fuel, and we are not getting in new fuel shipments. that seems to be the situation. the gas but the is with best buddy. i was joking about that check. i have given you an enormous amount of free publicity. >> siddeley helping the motorists in the situation room we're talking about where to get gas. stuart: you're all heart. seriously, why do we still have a gas line problem in new jersey and parts of new york? >> any problem we have had from power outages and terminals that don't have gasoline has been made worse by the fact that everybody in new york city seems to be out there waiting in a pot in one of the five boroughs which is what is really making the problem worse. an insatiable demand for gasoline because people think their is a real shortage. intense demand and what will likely be followed by very little demand in the weeks ahead. stuart: do we have a surprise plot on? why don't i see athletes of tankers coming in from other states delivering gas.

>> there is part of that is the problem, logistics', getting all the tankers, but we don't suddenly have some many tankers standing by idly. there likely going for the distances to get the gasoline. going on for another shipment, and some charles son of gasoline. so trucks are going further. more time to deliver less turnaround. stuart: a lot of people are saying, wait a minute. i've been without power. wait a minute. i would have thought we could have arranged logistics'. are you not little critical? >> it has been a mess. new york city could have done a lot more. they could be rationing fuel. it has been a mess. and there has not been enough of a response at stations, stations having lines, but there is only so much you can do when people are in panic mode. >> would you also say the president should have redirected , the entire stimulus to my not say amphora to mature the terminals that have been flooded or you can drop off gasoline at the privately owned

terminals and and get them on trucks. should we have done more infrastructure spending full bore instead of this piecemeal pork barrel spending that's going on to help gasoline get to where it's needed. >> well, hindsight is 2020. >> i'm saying going forward. >> absolutely. certainly it is advisable to have these charles not have the possibility of going down hill or they should be the first priority when things do come back, because gasoline is obviously tied into what we do on a daily basis, driving to work, living airlines. gasoline stations and terminals should be among the first. >> how much energy does it take? a lot of these messages and the gas the did not have power, so they cannot pump out. couldn't fema, for all the talk the president made about how he's going to get rid of the red tape, why doesn't fema just drop a generator to. >> some places are not hooked up to excepted generator, but that is a great point. white demarest dishes that have generators. e-mails from tv trucks. >> but the president said in a okay, we're going to cut out all

the red tape and get them what they need. well, he hasn't. >> that's right. and there's definitely room for improvement. not enough stations have power or gas. stuart: it will power of one pump but your operation. that is a pretty simple thing. >> that's a great question. i don't have that answer. you would expect that more could have been done. stuart: real fast, how much longer? >> on a 25% of stations have gasoline. that is a tiny percentage. >> have guests are can pump. >> can pump gasoline that have gasoline. i don't know of power outages. probably not a whole lot of power outages, but 25 percent of stations have been reported to us as having gas. stuart: we appreciate you being with us. thank you for coming, and receive a consent. very interesting. afl-cio chief says don't worry about the debt. just go after the rich.

we have something to say about that in a moment.

stuart: a pretty clear message coming from leading democrats, tax the rich to fix the national debt. even the unions to begin. that's why we say even the unions. unions to begin.

afl-cio chief richard trumka not only says go after the wealthy, but most americans don't care about the deficit. that's what he says. listen to this. >> strongly believe that we should make sure the wealthy start paying their fair share of taxes. they believe that we should protect medicare and medicaid and social security benefits from cuts, and voters reject the idea that bring down the federal budget deficit is an overriding priority. stuart: you don't even have to read between the lines. he is saying very clearly, tax the rich, tax the now. don't worry about spending cuts. promise them, but hold them off until later. and don't worry about the deficit. let at that mount. that is clearly what the man is saying. in my right? >> a millionaire socialist. he makes about $300,000. he once said command of quoting. being called a socialist is a step up for me.

this is richard trumka. we have to remember, it used to be headed by people who were basically to the right of where he is certainly. i would not call them from the center-right. certainly on the left, but the afl-cio used to represent america much more than this guy help. >> nobody takes this seriously. it is a way to basically to explain away the rampant growth of government spending. stuart: i take it very seriously question of the import of it that he has made happen, but it is a way to explain away the rampant growth of entitlement and government spending and the president. then the way to fix it is to tax the rich because you're all the polling 140 billion year. that's no way cutting into the deficit. stuart: he's going with the krugman, paul krugman, new york times. >> bomber in rod consultants. stuart: they're going with that line which is, you don't have to worry about the deficit because money is cheap. it costs nothing for the government to borrow, and you can print it. >> you know what does it on a

story about as a lot. of quoting, forget about the law. this is about more than that. there are a bunch of laws that states have been putting into force, starting with wisconsin and going throughout. ohio has 110 indiana has one. the right to work laws. what happens if the union feels empowered by this election and says forget about those laws. he said that. about the laws. let's go ahead and press with our union demands, even if the state says no way. you can't do it. it is incredible how far this guy has gone and still become head of the afl-cio. stuart: we face this fiscal cliff being massive tax increases and huge spending cuts come january the first. we are running into that. it must have a solution before we get to january the first. >> is a socialist. is that care. outlines of the dealer becoming apparent. you and i disagree about taxation, but tax revenue. >> wait a minute. we don't disagree about taxation. lower tax rates.

and just hoping that we get lower tax rates as part of the deal. stuart: the outline of the deal that i see is more tax revenue coming into the federal government, promises of spending cuts delayed forever, but -- >> this happen to a four. stuart: that is what i think we would get in the first year. >> history is on your side. >> a terrible thing to be saying . but. >> habitually self deceiving. stuart: good last word. >> stethoscope cliff is coming. will something be done to avoid it? it's all in the highlight reel, again, next.

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stuart: the highlight reel. rowland, please. two days after the election, the betting is starting and capitol hill. it's all of the disco cliff. >> there is an alternative to going over the fiscal cliff. in whole or in part. stuart: a tax increase looks almost certain and soon. >> people making all this money

want to contribute a little bit more. >> that is where i think there will make their biggest mistake. >> another politician. i a compromise. stuart: obama has raised taxes on the rich. i still have a little bit of hope that somebody will do something reasonable in this country. i'm inclined to believe it is almost inevitable that tax hikes are coming our way. stuart: let's review our discussion. >> you don't think anybody will do anything reasonable in this country again? is going to happen. believe it or not somebody will do something reasonable. >> you might as well try to teach it -- teach a cat to bark. it doesn't feel like it right now. stuart: there is no way you will take a victorious barack obama away from raising tax rates on the ritz. >> if that happens the economy is socked in the democrats will win for a generation. stuart: they're in my year saying leave it right there. got it? it is yours.